Swedish defence and security group Saab said Tuesday it had signed contracts with Sweden's military for two submarines worth 8.6 billion kronor (933 million euros, $1.04 billion).
The order from the Swedish Defence Materiel Administration (FMV) covers the construction of two new Type A26 submarines, as well as a mid-life upgrade for two Gotland-class submarines.
Deliveries of the two new subs will take place in 2022 and 2024, Saab said in a statement.
The upgraded subs will be delivered in late 2018 and late 2019.
Saab said the A26 was a high-tech submarine with "long-endurance submerged performance and excellent manoeuvrability in all waters."
It will be "highly survivable thanks to modern underwater stealth technology and a unique heritage of shock resistant design."
The subs will be powered by conventional diesel-electric propulsion machinery and equipped with the Kockums Stirling Air-Independent Propulsion (AIP) system, making them difficult to detect.
In April, the Swedish government announced plans to raise defence spending by 10.2 billion kronor (1.09 billion euros, $1.18 billion) for 2016-2020, mostly to modernise ships to detect and intercept submarines, amid increasing Russian military activity in the Baltic Sea region.
Sweden is a non-NATO country with a longstanding tradition of military non-alliance.